Lawsuit for victims of Ed Horne in limbo as lawyer caught in conflict of interest

More than 100 victims of convicted pedophile Ed Horne, who are suing their former lawyers from a multimillion-dollar settlement, are now without a lawyer.

Judge rules countersuit against Alan Regel has merit

More than 100 victims of convicted pedophile Ed Horne, who are suing their former lawyers from a multimillion-dollar settlement, are now without a lawyer. (Nick Murray/CBC)

Victims of convicted pedophile Ed Horne are now without a lawyer in their lawsuit against their former lawyers.

In another twist to an already convoluted lawsuit, Alan Regel, the new lawyer for the victims, was unable to stop a countersuit against him, thus putting him in a conflict of interest and unable to further represent his clients.

More than 100 victims are suing their former lawyers who represented them in a multimillion-dollar settlement with the Government of the Northwest Territories. They allege Geoffrey Budden and Stuart Morris took too big a share of the settlement, and wrongfully charged HST. They launched the lawsuit in August 2015.

But the lawsuit came to a halt in October 2016 after their new lawyer, Regel, was himself sued over allegations of negligence in recuperating the HST. Budden and Morris's lawyer, James Morton, argued Regel could have got the HST back from the federal government, rather than suing Budden and Morris for it.

Because Regel had become a defendant in the case — known as a third party notice — he couldn't simultaneously represent his clients, because it put him in a conflict of interest.

Regel retained his own lawyer, John Rossall, to try and have the third party notice dismissed, arguing it was a frivolous stall tactic and an abuse of process.

A brief explainer on the main players in this complex lawsuit. (CBC News)

Last week, Justice Paul Bychok dismissed Regel's attempt to have the third party notice struck, meaning Regel is caught in a conflict of interest and, ultimately, leaving the victims without a lawyer.

With no representation, the 139 victims now have to all decide on where to go from here.

The last time the court tried to get instruction from each of them — spread out largely across the North — it took more than a year, and some died in the meantime.

Imbalance of power

In his ruling, Bychok also drew concerns to what he called "a power imbalance between the plaintiffs [the Horne victims], and the applicant [their lawyer, Regel]." 

Bychok said the victims are now reliving "the painful events of their abuse" and on top of that may not fully understand what's happening as their case moves through the legal system.

Bychok pointed to a hearing in January where he gave the opportunity to plaintiffs to come forward. One did, asking why he had to sign so many documents, when he wasn't able to comprehend what the document meant.

"This intervention highlights the very real vulnerability of the plaintiffs involved in this litigation," Bychok wrote.

"It validates this Court's ongoing concern that the plaintiffs may not understand their individual rights, as well as the nature and import of these proceedings."

About the Author

Nick Murray is a CBC reporter, based in Iqaluit since 2015. He got his start with CBC in Fredericton after graduating from St. Thomas University's journalism program. He's also worked two Olympic Games as a senior writer with CBC Sports. You can follow Nick on Twitter at @NickMurray91.